SaaS replacing and giving new life to legacy applications analyst claims

SaaS adoption is on the rise worldwide, with most companies planning to boost their investment, according to new report

By Chris Kanaracus

November 30, 2012

IDG News Service

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Companies are not only buying into SaaS (software as a service) more than ever, they are also ripping out legacy on-premises applications and replacing them with SaaS, according to analyst firm Gartner.

"In the past 12 months, Gartner has seen a decline in the proportion of SaaS deployed to augment existing applications," according to Gartner's report, which explores global SaaS adoption patterns. It found regional patterns, with SaaS replacing existing systems in mature markets, while often being the first business solution implemented in emerging markets.

Much of SaaS adoption is fairly recent, Gartner found, with 71% of responding organizations overall reporting that they have been using it for less than three years. Brazil showed the highest level of new users; 27% said they had adopted SaaS less than a year ago, Gartner said.

A sizable majority of respondents in all regions said they planned to increase their investments in SaaS. Only small percentages planned to cut spending on SaaS, according to the report.

"Seeing such high intent to increase spending isn't a huge surprise as the adoption of the on-demand deployment model has grown for more than a decade, but its popularity has increased significantly within the past five years," the report states. "Initial concerns about security, response time and service availability have diminished for many organizations as SaaS business and computing models have matured and adoption has become more widespread."

Users are also increasingly weighing whether a SaaS vendor also offers PaaS (platform as a service) capabilities for extending the software and building new applications, according to Gartner. Some 56% called PaaS "very important," another 22% termed it a "requirement," and 18% said it was "somewhat important," the report states.

Gartner surveyed 592 respondents during June and July in the US, Asia-Pacific, Europe and Brazil, covering 10 countries in all.